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Reconceptualizing the Firm in a World of Outsourcing and Offshoring: The Organizational and Geographical Relocation of High-Value Company Functions

Published on Dec 1, 2010in Journal of Management Studies5.84
· DOI :10.1111/j.1467-6486.2010.00945.x
Farok J. Contractor27
Estimated H-index: 27
(RU: Rutgers University),
Vikas Kumar29
Estimated H-index: 29
(USYD: University of Sydney)
+ 1 AuthorsTorben Pedersen45
Estimated H-index: 45
(CBS: Copenhagen Business School)
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Abstract
In the largest sense, global strategy amounts to (1) the optimal disaggregation or slicing of the firm's value chain into as many constituent pieces as organizationally and economically feasible, followed by (2) decisions as how each slice should be allocated geographically (‘offshoring’) and organizationally (‘outsourcing’). Offshoring and outsourcing are treated as strategies that need to be simultaneously analysed, where just ‘core’ segments of the value chain are retained in-house, while others are optimally dispersed geographically, as well as dispersed over allies and contractors. This amounts to a reconsideration of the nature of the firm that captures the dynamic changes in global configuration and a reconsideration of what constitutes ‘core’ activities that need to be retained internally. The article proposes a new research agenda that searches for each firm's optimal degree of disaggregation and global dispersion given that further scattering of value chain activities entail benefits as well as increased complexity and costs.
  • References (51)
  • Citations (314)
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References51
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#1Yuan Li (SJTU: Shanghai Jiao Tong University)H-Index: 33
#2Zelong Wei (Xi'an Jiaotong University)H-Index: 10
Last.Yi Liu (SJTU: Shanghai Jiao Tong University)H-Index: 27
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#1Paul E. Bierly (JMU: James Madison University)H-Index: 22
#2Fariborz Damanpour (RU: Rutgers University)H-Index: 25
Last.Michael D. Santoro (Lehigh University)H-Index: 20
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#1Stephan von Delft (Glas.: University of Glasgow)H-Index: 3
#2Sebastian Kortmann (UvA: University of Amsterdam)H-Index: 4
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#1José Pla-Barber (University of Valencia)H-Index: 13
#2Esmeralda Linares (University of Valencia)H-Index: 1
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#1Filippo Albertoni (Polytechnic University of Milan)H-Index: 2
#2Stefano Elia (Polytechnic University of Milan)H-Index: 9
Last.Lucia Piscitello (Polytechnic University of Milan)H-Index: 17
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View next paperThe Strategic Nexus of Offshoring and Outsourcing Decisions